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Fraud on the Market

Imagine that you bought 1000 shares of stock in Jimmy Co., a large publicly traded pharmaceutical company at $50 per share. Before you bought your stock, Jimmy Co.’s officers had been claiming that a new drug that was being developed would greatly enhance the ability to treat the plague. They predict that the drug will sail through the FDA testing because the drug is perfectly safe and the manufacturing process is up to code. They will get approval and be on the market in two years. Their stock price has been rising ever since that announcement and is now where you bought it, at $50. Continue reading

Deferred Prosecution Agreements and Tax Write-Offs

Earlier today the US Department of Justice announced that it has reached a deferred prosecution agreement with Toyota Motor Corporation regarding the “unintended acceleration” issues that owners of certain models claim to have experienced back in 2009 and 2010.  The announcement is of little note; as with most announcements of its kind it represents a chance for the DOJ to publicize itself and it is understandably a bit over-eager to praise the victory for safety.  The agreement itself, however, is interesting as Toyota has agreed to treat the $1.2 billion settlement amount as a penalty paid to the US government, including for tax purposes.  The upshot is that Toyota will not be able to take a tax deduction or credit for paying the settlement. Continue reading

Photo taken by Bryson Davis.

Introduction to Crowdfunding

This post will be the first post on the new concept of crowdfunding. Crowdfunding is billed as being a savior of small business and a boost to the power of the everyman entrepreneur by tapping into the power of the internet and the masses to provide funding for their businesses. This first post will give you the basics of what crowdfunding is and what restrictions the JOBS Act (the law which created it) places on it. Continue reading

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An Introduction to Anti-Trust

One of the first legitimately important things that law students learn during their time in law school is that almost everything laypersons think they know about the law is wrong.  Sometimes the wrongness is simply the result of a catchy urban legend, like the famous (and false) story of a Winnebago driver who went back to make a sandwich after setting the cruise control and then supposedly sued Winnebago for the resulting accident.  Sometimes it’s a combination of superficial reporting and a lack of time or desire to look into the suit closely enough to see that there is legitimate substance to it, as was the case with the undeservedly infamous McDonald’s hot coffee case.  And sometimes it’s simply the result of people not understanding that their middle school and high school history classes gave only a rather superficial outline of events because it’s not really possible to do more than that within the constraints of the class. Continue reading